Our Ref C20081269 Contact Officer: Rohan Connor Contact Phone: 02 6243 1354

20 February 2008

Australian

Commission

GPO Box 31 31 Canberra ACT 2601

23 Marcus Clarke Street Canberra ACT 2601

tel: (02) 6243 11 11 fax: (02) 6243 11 99

Dear

Rinker Australia Pty Ltd application for revocation and substitution A91082 - interested party consultation, interim authorisation

The Australian Competition and Consumer Commission (ACCC) has received an application for re-authorisation from Rinker Australia Pty Ltd, trading as Readymix Concrete (Readymix). The ACCC invites you to comment on the application. A summary of the authorisation process including how to make a submission to the ACCC is attached.

Readymix has sought re-authorisation of a cartage allocation system amongst independent concrete carriers in Western Australia. The Equal Opportunity of Trips system works by allocating a number of points per load and distance. On a rolling 12 month basis, the system ensures that a carrier's aggregate points are within a specified margin (currently k 10%) of the Western Australian metropolitan fleet average.

The authorisation previously granted to these arrangements in 2003 is due to expire on 24 February 2008.

A full copy of the application for authorisation is available on the ACCC's website . Alternatively, you can contact Rohan Connor on (02) 6243 1354 to obtain a hard copy of the application and submission.

Interim authorisation

Readymix requested interim authorisation to continue to operate its cartage allocation system in Western Australia while the ACCC considers and evaluates the merits of the application.

The ACCC has granted Readymix interim authorisation on the basis that there were benefits in allowing the cartage allocation system to continue in its current form while the substantive application is assessed. The ACCC notes that granting interim authorisation will prevent disruption to the commercial operations of both Readyrnix and independent contractors during the assessment period.

The ACCC may review its decision on interim authorisation at any time. The ACCC's decision in relation to interim authorisation should not be taken to be indicative of whether or not final authorisation will be granted by the ACCC.

Request for submissions on the application for authorisation

The ACCC invites you to make a submission on the likely public benefits and effect on competition, or any other public detriment, from the proposed arrangements.

In support of its application, Readyrnix claims that the cartage allocation system, known as Equal Opportunity of Trips (EOT) system, has resulted in public benefits that include:

improved efficiency of operations by providing an incentive for carriers to cart full loads

improved efficiency of operations through lowered transaction costs, and those of 'lorry-owner drivers' (LODs), by negotiating under the arrangement

improved industrial harmony

environmental benefits of decreased washing of agitators, reduction in traffic on roads

improved public safety by removing incentives for drivers to perform their duties in an unsafe manner, such as 'first come first served' allocation system.

In granting authorisation to the present cartage allocation system in 2003, the ACCC noted the following potentially anticompetitive detriments:

restriction on the ability of Readyrnix to allocate work in a discretionary, efficiency maximising manner;

restriction on the ability of concrete carriers to 'opt-out' of the EOT system

a reduction in concrete carrier's ability and incentive to provide differentiated services, for example in areas such as customer service, in order to obtain additional cartage work.

To assist the ACCC in its consideration of the current application it would be helpful to obtain your comments on Readymix's claims as well as the anti-competitive detriments (if any) that have resulted from the introduction of the EOT system. Please note, the ACCC recommends that you consider Readymix's submission before making a submission.

The ACCC seeks your comments on the application for authorisation by Thursday, 13 March 2008. The ACCC asks for submissions to be in writing so they can be made publicly available. All submissions will be placed on the ACCC's public register subject to any request for exclusion (see attached guidelines). Applicant

Timetable

The ACCC will progress its assessment of the application in a timely manner. An indicative timetable is set out below for your information.

If you wish to lodge a submission please address it to:

8 February 2008

21 February 2008

13 March 2008

27 March 2008

ApriVMay 2008

MayIJune 2008

JuneIJuly 2008

The General Manager Adjudication Branch Australian Competition & Consumer Commission GPO Box 3131 Canberra ACT 2601

Lodgement of application and supporting submission.

Public consultation process begins.

Closing date for submissions from interested parties.

Applicant responds to issues raised in the public consultation process.

Draft determination.

Public consultation on draft determination including any conference if called.

Final determination.

Submissions can also be lodged by email to ad~udication~accc.~v.au or faxed to (02) 6243 121 1.

Please advise if you do not wish to make a submission at this time, but would like to be informed of the progress of the application at the draft and final determination stages.

Please provide a preferred contact email address for future correspondence.

You may forward this letter to any other party who may wish to make a submission to the ACCC regarding the application.

This letter has been placed on the ACCC's public register. If you wish to discuss any aspect of this matter, please do not hesitate to contact Rohan Connor on (02) 6243 1354 or Hew Atkin on (02) 6243 1 3 63.

Yours sincerely

(-.$ DaVidHatkld A/g General Manager Adjudication Branch

Rinker Australia Pty Ltd application for revocation and substitution A91082 - list of interested parties

BGC Australia Pty Ltd

Boral Limited

Hanson Australia Pty Ltd

WA Premix

Go Crete Pty Ltd

Transport Workers' Union (WA)

Australian Government Department of Education, Employment and Workplace Relations

Concrete Institute of Australia (WA)

Cement Concrete & Aggregates Australia

Australian Trucking Association

Cement Australia

Blue Circle Southern Cement

Mater Builders Association (WA)

State of Western Australia Department of Consumer and Employment Protection

Relevant concrete carriers currently operating under the EOT system